Joint hindu family business

Meaning and features of HUF

1. Joint Hindu Family Business

2. MEANING Joint H indu family business refers to a business which is owned by the members of a Joint Hindu family . It is also known as Hindu Undivided Family business .(HUF) It is the one of the oldest forms of business organization found only in India . The basis of membership in the business is the birth of a male member in a joint Hindu Family and three successive generations can be in the business. Only male members are entitled to be part of this business The business is managed and controlled by the eldest member of the family is known as the Karta Other male members are known as Co- parceners

3. FEATURES 1. Formation Governed by the Hindu Succession Act , 1956 2. Membership Membership of a the HUF business is effected by the birth of a male child. It does not require any agreement between family members. 3. Liability Karta – Unlimited Liability Co- parceners – Limited to his share in the HUF property.

4. 4. Control Business is managed and controlled by the eldest member of the family known as Karta. He takes all the decisions and in the business and co – parceners will have to abide by the decisions. 5. Continuity Continuity of HUF business is not affected by the death or insolvency of co- parceners or even Karta. If Karta dies the next senior most male member takes the position of Karta , leaving the business stable.

5. 6 . Number of members I n a HUF business there is no restriction on the number of co- parceners. But the membership is limited to 3 successive generations. 7. Minor members membership in the Joint Hindu Family business is effected by the birth of a male child. Thus , minors can also be members of the business.

6. Questions 1. Which form of business organization is found only in India? 2. The head of the HUF business is called ------------------------? 3. The members of a HUF business is known as -----------------? 4. The liability of the members of a HUF is ----------------------? 5. The Karta in HUF business has ----------------------------------? 6. The membership in HUF business is limited to ----------------?